Expansion of Medicare-Certified Home Health Agencies in 2024
The number of Medicare-certified home health agencies expanded in 2024, especially in Los Angeles County, California. This area has been flagged by the California state auditor for instances of hospice-related fraud, according to the Medicare Payment Advisory Commission (MedPAC).
Outside California, the supply of these agencies experienced a slight decrease of approximately 1% between 2019 and 2024, as noted in MedPAC's July 2026 Data Book. Nevertheless, the total number of Medicare-certified home health agencies rose to 12,234 in 2024, up from 12,057 the previous year, reflecting a 1.5% increase.
MedPAC also observed a decline of 2.1% in fee-for-service beneficiaries using home health services in 2024. This drop is attributed to a shift towards Medicare Advantage and fewer fee-for-service hospitalizations, which are typical referral sources for home health services.
Impact of Medicare Advantage and Financial Margins
Medicare Advantage continues to apply downward pressure on the home health sector, primarily due to its lower reimbursement rates versus fee-for-service Medicare. Despite this, MedPAC data indicates high fee-for-service Medicare margins for freestanding home health agencies, reaching 21.2% in 2024. Such margins have remained steady since the prospective payment system began in 2000.
For-profit agencies reported a fee-for-service Medicare margin of 23.1% in 2024, notably higher than the 12.2% for nonprofit agencies. MedPAC has recommended reducing the Medicare home health base payment rate due to these margins. Hillary Loeffler, vice president of policy and regulatory affairs at the National Alliance for Care at Home, warns that ongoing rate pressure could destabilize the sector and limit care access.
In 2024, the average number of in-person visits per home health user was 24.6, consistent with numbers from previous years. Additionally, MedPAC reported that the majority of Medicare home health admissions were community-initiated, with 75% in 2024, while only 25% followed hospitalization or post-acute care.